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Commodity and Currency Article

Cocoa
The Cocoa Market has been up around 28 year highs now for the past couple of months, although in the last week there has been a substantial drop, albeit only back to levels seen at the previous high in October. The drop was halted by Industry using the dip to step in to take cover, however at the real prices paid this still represents a significant price hike. Port arrivals in the Ivory Coast are around 11% higher than this time last year, although there is clear evidence of a lot of smuggled cocoa from Ghana amongst this volume, as the farmers get a better price under the current Ivorian agreements. Also it is widely felt that overall world demand and supply is in balance now, so again the fundamentals would under so called normal circumstances, lead to the market easing back further. The bad news for chocolate users is that prices for later this year will in all likelihood be higher than now.

 

Dairy
Prices have weakened during the first few weeks of 2010 as we expected they would. Whey Powder is still in short supply, bulk Milk Powders are definitely weakening as availability grows.

Currency
Sterling started the month in a weak position, but then improved as the month went on. We still expect that the Euro will suffer during the coming months certainly we are seeing a very weak US$ at the moment with the rate around $1.58 = £1 today...

 

Tony Mycock
5th February 2010



   
   
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HB Ingredients
Cocoa House, 22 Bell Lane,Bellbrook Industrial Estate,
Uckfield East Sussex. TN22 1QL.
Tel:+44(0)845 88 00 799 Fax:+44(0)845 88 00 833